BT and Virgin Media on Ofcom’s ‘half speed’ report

An Ofcom report published yesterday suggests that the average download speed received by UK broadband customers is only just over half the speed of the average advertised rate. Data from the report shows that while the average broadband package is sold as “up to” 7.1Mbps, the actual average speed delivered is thought to be 4.1Mbps, little more than half the average theoretical maximum.

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Tiscali continued to lose subscribers prior to TalkTalk takeover

Tiscali has just released its latest list of figures for the last quarter, which shows a steady decline in subscribers from nearly 1.76 million at the end of last year, to 1.7 million at the end of Q1 2009 (31st of March).

This news comes just a week after it was announced that TalkTalk and AOL owners Carphone Warehouse bought the UK arm of the Italian firm, which was struggling with debt repayments, for £263 million, £20 million of which went towards clearing debts, according to the press release found here (PDF).

It is thought that once the transaction is complete next month, Tiscali subscribers will be migrated to the TalkTalk network and be offered the basic TalkTalk Essentials service (8Mbps speeds, 40GB download limit, Evening & Weekend calls) as standard.

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TalkTalk to WalkWalk from Carphone Warehouse

Carphone Warehouse has decided to put an end to speculation regarding the break up with TalkTalk… by announcing that the group is breaking up.

Whilst the demerger won’t happen for some time yet, Carphone founder Charles Dunstone said that the current economic climate will “undoubtedly present challenges” which may see the broadband provider split from its parent company “in the year ahead”.

Under Carphone’s plan, the high street mobile retailer and broadband provider TalkTalk would be split into two separate companies.

“We are well funded, and have clear and simple strategies for our two businesses which balance growth with tight operational efficiency and cash generation,” said Mr Dunstone.

It is unsure whether AOL will merge with the TalkTalk, or remain part of the Carphone Warehouse group.

Carphone to buy out beleaguered Tiscali?

After reports of Tiscali falling into some serious financial difficulty, it has emerged that TalkTalk and AOL owners Carphone Warehouse are rumoured to be plotting a last minute takeover bid.

Carphone was once the frontrunner for a Tiscali takeover bid launched last year, which fell through at the last minute. Sky then stepped into the bidding war, stumping up £450 million for the Tiscali’s UK services, but again, negotiations deteriorated before a deal could be worked out.

Last September, a Carphone buyout of Tiscali would have seen its joint subscriber base swell to a massive 4.6 million, overtaking BT at the head of the British Broadband league table. A Sky purchase would have seen the satellite broadcaster become the third biggest ISP, with its customer base rising to 3.6 million.

Tiscali are some €500 million in the hole, and as the credit crunch continues to bite, the lenders of Europe are calling for their pound of flesh. After Tiscali revealed that its shares have been suspended on the Italian stock market following a 50 per cent tumble, it asked lenders to freeze debts in order to “allow a period of suspension for interest repayments and financial covenants,” according to a piece in the Telegraph.

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Tiscali buyout looks uncertain after shares suspended

Tiscali appear to be the first victims of the recession in the British Broadband Big 6, after its shares have been suspended on the Italian stock market after taking a 50 per cent tumble this morning after it was revealed that the group, which collectively owes banks €500 million, failed to meet a debt repayment.

Tiscali is currently the fifth largest broadband provider in the UK, with a subscriber base of around 1.7 million. Tiscali, who listed looking for a buyer for their UK consumer services as a top priority in 2008, were looking for at least £600 million. Among those interested in a buyout included TalkTalk/AOL owners Carphone Warehouse and Sky – the latter stumped up £450 million for Tiscali’s UK arm, but talks broke down, becoming “impossible to proceed,” according to Tiscali.

This means that Tiscali will be coming to the banks of Europe cap in hand, at a time when fiscal security is shaky to say the least.

TalkTalk to split (from Carphone Warehouse)?

The Grande Fromage of TalkTalk and AOL owners Carphone Warehouse, Charles Dunstone has launched a “formal review of the group’s corporate structure” which could lead to the breakup of its telecoms division, which could potentially see TalkTalk becoming a fully independent ISP.

However, it is more than likely that usual suspects Sky, Vodafone, Orange, BT and the gang will be offered the chance to bid for the customer bases of both TalkTalk and AOL beforehand – TalkTalk is believed to account for some £1bn of Carphone Warehouse’s current £1.3bn valuation.

The BestBuy deal is said to be taking its toll on the group, and Dunstone is reportedly considering splitting the group in half, allowing for easier management of the retail arm of Carphone Warehouse.

“We recognise, however, that the structure of the Group may now no longer be appropriate for the optimal development of the two businesses,” said Dunstone. “The Board has therefore initiated a formal review of the Group’s corporate structure and capital requirements, which may lead to a separation of the two businesses. In this instance I would remain closely involved with both companies.”

This is a bit of an about turn for the company which, earlier this year, was thought to be the favourite to buy up the UK arm of Tiscali’s home broadband customers, a move which would have seen Carphone become the biggest ISP in the country. Now Sky are thought to be in negotiations to buy up Tiscali’s UK operations instead.

Sky enters talks over Tiscali deal

Sky have entered negotiations to aquire currently fourth largest ISP Tiscali, after rival bidder Carphone Warehouse – which runs its own Talk Talk and owns the UK arm of AOL – reportedly pulled out of the auction.

The triple-play provider is thought to have put forward an indicative offer of £450 million for the Italian company’s UK operations, with the potential for a further price drop. The potential purchase is seen as a strategic departure for the company, which currently offers free broadband to customers who also sign up for to its television package. 20% of Sky TV subscribers have taken up the offer so far.

If Sky carries the deal forward, it will become the third largest UK broadband provider with 3.6 million, overtaking Carphone Warehouse and creeping up behind its main rival Virgin Media, which hopes to improve on its current 3.8 million customer base in its third quarter report, to be announced this Thursday. BT is currently in pole position as Britian’s biggest broadband provider. The telecoms giant is thought to have walked away from the long-running auction, along with Vodafone.

Earlier on in the bidding, Vodafone had been considered a strong player as the only company willing to buy up both Tiscali’s UK and Italian broadband operations, but has pulled out since the business’s valuation has fallen.

Tiscali has been trying to find a buyer since May. The provider has around 1.2 million broadband users in the UK, although it is believed to have lost market share recently, perhaps due to news that the company is planning to up sticks and sell to the highest bidder. Last Friday Sky revealed that its broadband take-up had risen to 1.8 million customers.

Carphone Warehouse to launch 100 Best Buy stores across Europe

Carphone Warehouse is to open four or five electronic megastores in the UK as part of a joint venture with the US consumer electronics giant Best Buy. The group said that the current economic downturn was “the best time” to launch.
However, Best Buy sounded a note of caution, saying that the group would “temper” the rollout in line with the slowdown in consumer spending. “It’s not a race” said Bob Willett, Best Buy’s international chief executive. Around 100 stores are planned for launch throughout Europe in the next five years, with the group hoping to grab 10 per cent of the European retail electronics market ‘over time’.

Carphone Warehouse and Best Buy said in a trading update that they would jointly spend £20 million on the launches in the current financial year to March, with another £30 million earmarked for the following year alongside £40 million in capital spending. The joint retail arm, branded Best Buy Europe, predicts revenues of around £6.2 billion and underlying earnings of £3.5 million by March 2013.

Best Buy bought half of Carphone Warehouse’s retail business, encompassing 2,430 stores in Europe and the US, for £1.1 billion in May. Plans had originally been set to launch the new stores in spring 2009 or the end of 2008. They have now been pushed back 6 months to summer 2009.

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Virgin Media revealed as Broadband Speed King

Broadband speeds tests have revealed that Virgin Media now offers the fastest broadband speeds, snatching the crown from rival internet service provider O2 for the first time.

An industry official involved in the testing stated: “Virgin Broadband have finally overtaken O2 broadband as the UK’s fastest average download speed supplier. Data shows that the average download speed for a Virgin user is now 6.13Mbps as compared to 5.32Mbps for O2.”

The report indicates that Virgin Media also came ahead of other high-speed broadband providers, including Be Broadband and Sky Broadband.

Both O2 and Virgin offer high-speed packages of 20Mbps, helping ensure they fared well in speed tests against other providers who do not offer such a service. Virgin Media is likely to perform even better in future speed tests as it carries out plans to roll out its 50Mbps broadband service to a wider area.

Other broadband providers did not fare so well in the speed tests, with AOL and Eclipse Internet yielding the poorest results. AOL also scored worst on the upload speed tests along with TalkTalk, another Carphone Warehouse owned provider. For the month of September, the average download speed for Virgin Media was 6.128Mbps compared to an average speed of 5.321Mbps from Be Broadband and 5.32Mbps from O2.

Apple to give away MacBook laptops with O2 Broadband?

Word on the street says that Apple and O2 are about to launch their own laptop and broadband bundle deal, in a bid to emulate the popular connection-and-computer combos that have been on offer from the likes of Orange, AOL and the Carphone Warehouse for the last year or so.

The two companies are thought to be offering customers who sign up for either of O2′s mobile and home broadband services the choice of purchasing an Apple MacBook or MacBook Pro laptop either free, or for a heavily discounted price.

We presume, given the pricey nature of Apple stuff that the laptops won’t be free, but we can at least expect some form of price subsidy as part of the bargain. Then again, Apple surprised everyone with the release of the new iPhone 3G, which turned out to be significantly cheaper than everyone expected, so we could be in for a similar surprise this time round.

Currently, 3 Mobile are offering punters who sign up for their 5GB Broadband Plus plan for 24 Months a free HP 550 laptop, and Orange are giving away an Asus Eee PC 900 with every 18 Month 3GB contract.

AOL customers who sign up for the Wireless Plus package can currently claim a free Acer Aspire 5315 Laptop to every customer who signs up, and Vodafone are giving away a Sony NR32 with their 24 Month 3GB mobile broadband deal.